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Ukraine Retreats in Effort to Isolate Rebel Stronghold

Pro-Russia Separatists Advance in East as Preparations Build for Clashes Near Southern Port

Russian President Vladimir Putin praised pro-Russian separatists in Ukraine on Friday as Ukrainian President Petro Poroshenko dispatched troops to meet the Russian-backed advance. U.S. President Barack Obama ruled out a military response but hinted at sanctions.

MOSCOW—Ukraine suffered a setback in its efforts to isolate one of the biggest remaining rebel-held strongholds Friday as the separatists, backed by Russian forces, advanced further in the east, government Ukrainian officials said.

The continued fighting came as Russian President Vladimir Putin unleashed a verbal offensive against Ukraine and its Western supporters, accusing them of stalling efforts to reach a new cease-fire and open talks.